Which Type of Fixed Cost (1) Tends to Be More

question 19

Multiple Choice

Which type of fixed cost (1) tends to be more long-term in nature and (2) can be cut back more easily in bad economic times without doing serious harm to organizational goals and objectives?

• A) Choice A
• B) Choice B
• C) Choice C
• D) Choice D
• E) Choice E

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Definitions:

Cost of Goods Sold

The direct costs attributable to the production of the goods sold in a company, including materials and labor.

Net Sales

The amount of sales revenue remaining after deducting returns, allowances for damaged or missing goods, and discounts.

Gross Profit

The difference between net sales and the cost of goods sold, indicating the profit made before deducting expenses like salaries and rent.

Payroll Tax Expense

The cost to employers that includes the total of the employer’s FICA OASDI, FICA Medicare, FUTA, and SUTA taxes.